Luxembourg is a nation with a high degree of economic development. Its government steps in to try to reduce some of the drawbacks that may arise in a market economic system. Some firms in the country sell in competitive markets, whereas others are monopolies. Households in the country save a large share of their income. The chief reason for the country’s population growth is immigration.
(a)[2]
Identify two influences on the share of income that households save.
(b)[4]
Explain two monopoly features.
(c)[6]
Analyse why people migrate from one country to another.
(d)[8]
Discuss whether government intervention is able to overcome the disadvantages of a market economic system.
Worked solution & mark scheme
This 20-mark question has a full step-by-step worked solution and mark scheme. One marking point: “Rates of interest” …